Member
case 14-cv-600 is an insurance coverage dispute between
plaintiffs Andry Law Group, LLC and Jonathan Andry (sometimes
referred to collectively as “Andry”) and
defendants Continental Casualty Company and CNA Financial
Corporation and (sometimes referred to collectively as
“Continental”). The parties filed cross-motions
for summary judgment on the issue of whether the insurance
policy required Continental to defend Andry with respect to a
Court-ordered investigation and the resulting show cause
order concerning the administration of one of the class
actions settlements reached in this Multidistrict Litigation
No. 2179 (“MDL 2179”). (Rec. Docs. 13080, 13083)
Because there was no possibility of Andry incurring a
liability covered by the policy, the Court grants summary
judgment in favor of Continental and against Andry.

Background

In
2012, this Court approved the Economic and Property Damages
Settlement, a class action settlement that resolved many
private claims arising from the DEEPWATER HORIZON/Macondo
Well oil spill. (Rec. Docs. 8138, 8139) The settlement was
administered by the Court Supervised Settlement Program
(“CSSP”). Andry represented claimants in the
CSSP.

In July
2013, the Court appointed a Special Master to perform an
independent external investigation into the facts and
circumstances that led to the resignation of a staff attorney
with the CSSP, conduct fact-finding as to any other possible
ethical violations or misconduct within the CSSP, and
examine, evaluate, and make recommendations regarding the
internal compliance program and anti-corruption controls
within the CSSP. (Rec. Docs. 10564, 11288) As part of his
investigation, the Special Master interviewed Jonathan Andry,
who had retained counsel, and subpoenaed documents from him.
The Special Master disclosed his findings in a report issued
on September 6, 2013. (Rec. Doc. 11287) The Special Master
determined in pertinent part that Jonathan Andry improperly
utilized a personal relationship and referral fee arrangement
with the former CSSP staff attorney in an attempt to expedite
the claims of clients of law firms associated with Jonathan
Andry. The Special Master made multiple recommendations,
including that the report be provided to the Department of
Justice to determine whether Andry violated federal criminal
statues regarding fraud, money laundering, conspiracy, or
perjury; that the report be referred to the State Bar of
Louisiana to determine whether Andry violated any
disciplinary rules; and that the Court prohibit Andry from
representing any claimants in the CSSP and from receiving any
fees for this representation. The same day, the Court issued
an order that required, inter alia, that Jonathan Andry and
any associated law firms to show cause why they should not be
disqualified from representing claimants in the CSSP or
collecting fees from such claimants. (“Show Cause
Order, ” Rec. Doc. 11288) The Court also authorized the
Special Master to initiate legal action to
“clawback” the payment of any fraudulent claims,
including any contingent fees received by attorneys
representing claimants who made fraudulent claims.

Continental
Casualty Company issued a Lawyers Professional Liability
Policy (“the Policy”) to the Andry Law Group, LLC
for the period January 1, 2013 to January 1,
2014.[1] On October 15, 2013, Andry tendered notice
to Continental and demanded reimbursement for past and future
defense costs relating to the Special Master's
investigation and the Show Cause Order. Continental denied
coverage in a letter dated January 7, 2014, explaining
“the Policy [does] not afford coverage for this matter
because there is no possibility of covered
damages.” (Rec. Doc. 13080-17 at 3)
(emphasis in original) In February 2014, Andry sued
Continental in state court for breach of contract and sought
a declaration that Continental “is obligated under the
Policy to provide the attorneys with coverage for the defense
of the Court's demand for services.” (No. 14-600,
Rec. Doc. 1-3 ¶ XXIX(1)). The case was removed and later
consolidated with MDL 2179, where it was stayed while the
Court dealt with other matters in the MDL.

On
November 7, 2014, the Court conducted an evidentiary hearing
regarding the Show Cause Order and made oral findings. (Rec.
Doc. 13645) On February 26, 2015, the Court issued an order
imposing sanctions in accordance with its oral findings.
(Rec. Doc. 14221) Relevant here, the Court disqualified
Jonathan Andry from representing any claimants in the CSSP
and barred him from collecting attorneys' fees, except
that the Court permitted him to collect fees for previous
legal work actually performed on legitimate (i.e.,
non-fraudulent) claims that qualified for payment. The Court
also instructed the Special Master to report the matter to
the appropriate authorities regarding attorney discipline.
Jonathan Andry appealed. The Fifth Circuit affirmed, stating,
“The district court . . . did not abuse its discretion
in finding that Andry [and another attorney] violated the
Louisiana Rules of Professional Conduct or in fashioning an
appropriate sanction.” In re: Deepwater
Horizon, 824 F.3d 571, 586 (5th Cir. 2016) (per curiam).

On June
5, 2018, the Court issued a briefing schedule on the instant
cross motions for summary judgment (Rec. Docs. 13080, 13083),
which Continental and Andry had filed before their case was
stayed upon consolidation with MDL 2179. (Rec. Doc. 24599)
Each side filed a response (Rec. Docs. 24624, 24625), and
Continental also filed a reply (Rec. Doc. 24684). The Court
considered these motions on the briefs and without oral
argument.

Discussion

The
parties move for summary judgment on the issue of whether the
Policy required Continental to defend Andry in connection
with the Special Master's investigation and the
Court's Show Cause Order. A movant is entitled to summary
judgment when it shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a
matter of law. Fed.R.Civ.P. 56(a). The parties agree that
Louisiana law governs interpretation of the Policy.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Under
Louisiana law, &ldquo;an insurer&#39;s duty to defend is much
broader in scope than the insurer&#39;s duty to provide
coverage.&rdquo; Elliot v. Cont&#39;l Cas. Co., 949
So.2d 1247, 1250 (La. 2007). &ldquo;The insurer&#39;s duty to
defend suits brought against its insured is determined by the
allegations of the plaintiff&#39;s petition [against the
insured], with the insurer being obligated to furnish a
defense unless the petition unambiguously excludes
coverage.&rdquo; Id. (quotations omitted).
“Importantly, however, an insurer's duty to defend
is not triggered where ‘the pleadings . . . do not
reveal a possibility of liability [because] there is not a
claim that would ...

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